Use this simple change to save money on every AirBnB bookings

Airbnb is one of the most successful examples of companies following the sharing economy business models. Users can rent their own homes out or stay in other people's places where it is legal to do so.

If you have never used Airbnb, you can use my referral link here to gain between £30 free credit, or local currency equivalent, for your next stay.

One thing I stumbled across was how their ‘service fee' was different between mine and my friend's accounts when we were researching a place together. Compare the following two images below for a search in London.

The right hand picture is when I said my hometown was London, which calculated the service fee to be £40. The left hand side was when I put Abu Dhabi as my home.

You can change the address in your profile at any time, as many times as you need.

Airbnb Claims that the change in service fee is due to VAT, as indicated in their help section:

Airbnb charges VAT on its service fees for customers from Albania, Iceland, Norway, Russia, Seriba [sic], South Africa, Switzerland, Taiwan, The Bahamas, and The European Union. In Japan, JCT applies to the hosts and the guests. In New Zealand, GST applies to the hosts and the guests.

However, I am rather skeptical about the whole idea of it being purely down to VAT. In the 30-ish times I have used Airbnb, not once have I received a compliant VAT receipt (it would need to show the ex-VAT price plus the total VAT paid). Also, in the example above, the VAT rate in the UK is 20%, so the service fee should be 1.20 * £32 = £38.4. With rounding to an integer it could either be £38 or £39 but should not £40.

While an address difference will not make huge savings on each stay, a few pounds here and there will surely add up if you are a frequent user.

My VAT calculation is correct – £32 is the net price and it is 20% of that, meaning total VAT in this case is £6.4. Going from their dodgy inclusive price would be £40/1.2 = £33.33. You can also play around with http://www.vatcalculator.co.uk/ which confirms my calculation.